Bowen Buchbinder Vilensky

Archive for the ‘Binding Financial Agreement’ Category

What You Risk by Not Finalising Financial Arrangements When You Separate
Thursday, March 26th, 2015

damienbowen

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

26 March 2015

Something I’ve seen a lot of lately is people finding themselves in all sorts of problems as a result of not properly ending the financial relationship with their former spouse or de facto partner when they separate.  These situations seem to arise in one of three ways:

  1. The couple never discussed, or never finished discussing, the division of their assets and simply moved on with their lives;
  2. They discussed it and came to an agreement but never formalised it; or
  3. They discussed it, agreed, and formalised that agreement, but not in the proper way.

When this happens, it often leads to difficulties with ownership of property or exposure to liabilities.  But the big problems typically arise when they’ve gone their separate ways, then one person:

  1. Enjoys a windfall like a lotto win, gift or inheritance, or begins to make a lot of money from business venture; or
  2. Suffers a significant loss, such as a poor investment in shares, property or some unsuccessful business venture.

In these circumstances, there is a very real risk that a person could, quite properly, apply to the Family Court to try to ‘level the playing field’.  While the Court would take the source of the gain or loss into account, it typically applies a very broad brush approach.  If financial arrangements are not finalised in the correct way, the Court might well order an adjustment one way or the other.  Even if the Court decides it should not make an order, there would be significant legal costs incurred by both sides.

The only way to avoid this from happening is to enter into consent orders or a binding financial agreement following the breakdown of a marriage or a qualifying de facto relationship.  No other agreements or documents will prevent the Court from dealing with your matter.

For binding financial agreements to satisfy legislative requirements, each party must have received, among other things, independent legal advice.  This is not the case with consent orders though.  In relatively simple matters these can be prepared by the parties themselves with minimal help from lawyers.

To enter into consent orders you need to down load a Form 11 Application for Consent Orders from the Family Court of Western Australia website www.familycourt.wa.gov.au.  These are completed by both parties, then executed in the presence of a qualified witness (eg a lawyer or a JP).  They are then filed in the Court at a cost of $155.

The long and the short of it is this: if you want to be financially independent moving forward after the breakdown of a marriage or de facto relationship, putting an end to your financial relationship is an absolute must.  Those who neglect to deal with this, do so at their peril.

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What is a Binding Financial Agreement, and Why is it Useful?
Friday, March 20th, 2015

Damien Bowen

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

20 March 2015

A Binding Financial Agreement (BFA) is an agreement between two parties in which they set out how assets are to be dealt with in certain circumstances.  There are three types of BFA :

  1. An agreement made before a couple marries, setting  out how their assets will be divided if the marriage comes to an end (a Pre-Nuptial Agreement).
  2. An agreement made during a happy marriage  setting how  assets will be divided if the marriage comes to an end; and,
  3. An agreement made after divorce recording how they have agreed to divide their assets.

These three types of BFA are also available for people in de facto relationships, whether straight or gay, where:

  1. They are about to start living together;
  2. Are living together; or
  3. Are separated.

To be binding:

  1. The agreement must be in writing;
  2. Each party must have independent legal advice before they sign the agreement;
  3. The parties and their lawyers must all sign the agreement.
  4. One party holds the original and the other the copy.

BFA’s can only deal with property and spouse maintenance.The definition of property is very wide and  encompasses house, furniture, cars, a business, shares, investments, intellectual property rights, patents, jewellery and artwork, superannuation and entitlements in trusts and estates.

Typically, BFAs have the following uses:

Before marriage.  In cases where there is a wide disparity in the wealth of the two individuals, a BFA can essentially get this disparity out of the way of the relationship, by resolving, up-front, how assets would be divided should the relationship come to an end.

During marriage.  In cases where one of the couple benefits from, say, a major inheritance, a BFA can help remove tensions about what would happen to assets should the relationship come to an end.

After separating.  A separating couple can agree on how they are dividing their assets using a BFA, rather than through proceedings in the Family Court, as a quicker and less stressful way of resolving matters, so that they can move on with their lives.

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You’ve Told Him It’s Over… Now What?
Wednesday, June 25th, 2014

PatS

By Patricia Schrape, Associate at Bowen Buchbinder Vilensky Lawyers

25 June 2014

Whether it comes out of the blue for one of you, or you’ve both been avoiding the elephant in the room that is your broken relationship for months or years on end, the moment when it is finally acknowledged that the end is here can be a mighty big relief.

But what to do to extricate two separate lives from one which has been forged jointly?

If you haven’t done so prior, you should strongly consider getting confidential legal advice from an experienced family lawyer. Seeing a lawyer doesn’t mean you are committed to anything, and in most cases should be able to provide you with a good idea of what is ahead of you and what your rights and entitlements may be.

Obviously every couple have factors which will be more or less pressing, and the degree of animosity will determine how urgently action needs to be taken, but below are some things to keep in mind:

Finances/Property

  1. Think about joint bank or share trading accounts – if things are amicable, perhaps a broad discussion about usage will suffice. If there are accounts with significant funds, consider changing them so that both signatures are required to transact. Also consider each of you having your salary paid into accounts in your sole names, a first step towards practical financial independence;
  2. If you are living under the same roof for the time being, think about setting up a PO Box for your personal mail. If you’re moving out, be sure to redirect all of your mail;
  3. If you have a prolific online presence, be sure to change all of your passwords, even if you think your significant other doesn’t know them;
  4. Same with pin numbers for bank and credit cards;
  5. Cancel secondary credit cards if you suspect a vindictive shopping spree may be on the horizon. If possible, give a little notice before doing so to avoid their experiencing the embarrassment of a refused transaction and that embarrassment turning into wrath towards you;
  6. Change your Will to reflect your new circumstances, keeping in mind that unless the Will is drafted ‘in contemplation of a divorce’,  a Divorce Order will invalidate it;
  7. Contact your superannuation fund to change the nominated beneficiary for your super – superannuation does not form part of a deceased estate, so your Will can’t deal with it;
  8. Once your financial and property division has been agreed, be sure to have it legally documented so that all loose ends are tied up and everything is properly finalised. This can be done via Family Court Consent Orders or a Binding Financial Agreement.

Parenting

If you and your partner have children, this often introduces a whole other kind of complexity to the end of your relationship.

It is in everyone’s best interest to present a united front to the children, being supportive of them and each other as parents whilst you guide them through what will invariably be a big change in their lives. Try to agree with your partner on a routine, and stick to it.

Sometimes, however good the intentions, issues arise in relation to children.

There are numerous private and government agencies who provide counselling, mediation services and other helpful programs.

If things regarding the children look like they may become contentious, try to keep a record of arrangements – who they’re spending time with and for how long etc. In stressful times such as these, memory often falters.

Should the situation deteriorate, lawyers can assist in negotiating arrangements, and if necessary bring proceedings in the Family Court.

If the arrangements for the children are agreed, be sure to write them down clearly and concisely, so everyone is on the same page. You should seriously consider getting Family Court Consent Orders, which provide much greater certainty.

A final note on Facebook and social media. As much as your hundreds of friends and followers may happily provide support to you in this difficult time, it is usually best to stop altogether, or carefully limit usage. A tipsy posting about an estranged partner can all too easily get back to them and cause all manner of grief.

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Bowen Buchbinder Vilensky’s team of family lawyers is comprised of Partner Damien Bowen, Senior Associates Catriona Kilgallon and Sam Fahey, Associate Patricia Schrape and Solicitors Vince Bradley and Anna Westphal. You are welcome to telephone to make an appointment with any one of us.